Starbucks (NASDAQ: SBUX) is given credit by many for revolutionizing the American coffee drinking experience. The company however is both praised and criticized by environmentalists. Is Starbucks a leader of sustainability or greenwashed?
Starbucks stores use billions of cups annually. This requires enormous quantities of natural resources and energy before finding their way to landfills. Starbucks does however use cups that contain 10% post consumer recycled content.
Although this might sound like a meager quantity, Starbucks has helped shape the industry. This 10% achievement required authorization and testing by the Food and Drug Administration and had not been permitted previously.
“Starbucks should be commended for its ground-breaking efforts of working toward environmentally friendly packaging options that benefit both forests and the businesses that rely on them,” said David Ford, president and CEO of Metafore, a nonprofit group that collaborates with leaders in business and society to create innovative, market-based approaches that support forests and communities. “As a participant in our Paper Working Group project, Starbucks leadership in responsible purchasing of forest products gives other companies a clear path to follow.”
Starbucks also plans to reintroduce ceramic mugs and increase use of reusable mugs tenfold by 2010. They currently offer a $.10 discount for reusable mugs.
Most Starbucks stores are located in areas where coffee is not cultivated. Coffee must be transported thousands of miles and is often grown in sensitive ecosystems. This inherently isn’t sustainable.
Starbucks however partnered with Conservation International to create Coffee and Farmer Equity Practices (C.A.F.E. Practices), a set of environmentally, economically, and socially responsible coffee purchasing guidelines.
Starbucks purchased 65% of its coffee under these guidelines in fiscal year 2007. On the global market, Starbucks is a relatively small player with around 1% of the global coffee market, yet they have found a way to leverage their might and influence the coffee industry.
Locally Owned Coffee Shops
It would seem that Starbucks would have a very negative impact on local Ma and Pa coffee shops, but this isn’t necessarily the case. Some cafes report soaring sales when a Starbucks moved in by attracting coffee drinkers to frequent the neighborhood.
Others unfortunately have been the victims of a predatory store placement strategy. Cafes that were behind on their rent had their leases revoked to make way for a new Starbucks. It seems the impacts of Starbucks on local competition must be taken on a case by case bases, helping some while hurting others.
Resource Consumption at Stores
Starbucks has been under strong criticism recently because of wasteful water practices. Water is run continuously on dipper wells, which are used to wash utensils. This adds up to an estimated 6.2 million gallons of water wasted each day.
On the bright side, Starbucks recently announced a goal to reduce energy use by 25% and purchase enough renewable energy credits for 50% of their energy needs by 2010. They are working with the U.S. Green Building Council to create a prototype for a LEED silver certified store that can be duplicated across its portfolio.
Starbucks ranked #7 in Fortune Magazine’s “100 Best Companies to Work For” in 2008. Noteworthy practices by Starbucks include health insurance to part-time employees and domestic partner benefits for same-sex couples.
Does Starbucks Measure Up?
Starbucks is frequently targeted by environmentalists for unsustainable practices, but do they deserve this? The nature of the coffee industry is unsustainable in many ways, but Starbucks has helped lead the industry towards greener practices. I would like to see Dunkin’ Donuts ditch styrofoam and Nestle forgo genetically engineered coffee beans. Although there is certainly room for improvement, other companies have barely gotten started.